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What is the after-tax cost of debenture of ABC Ltd

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Question - A 5-year Rs. 100 debentures of ABC Ltd. were sold for a net price of Rs. 96.50. The coupon rate of interest is 14% p.a., and the debenture will be redeemed at 5% premium on maturity. The firm's tax rate is 40%. What is the after-tax cost of debenture of ABC Ltd?

Reference no: EM133095123

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